Collective wisdom says that women talk to other women about every aspect of their lives. Yet it seems one topic, insurance inside superannuation, is rarely aired.
Insurance inside superannuation provides a world-class benefit to most working families – a uniquely Australian concept. By its very group-style nature, it provides protection to all individuals, even those who are precluded from obtaining affordable insurance due to their occupation or a past serious illness, and relieves the significant pressure of underinsurance on the public purse – currently, underinsurance in relation to death, TPD, and income protection costs the government over $1 billion per annum in additional social security payments[1].
So, while everyone shares the costs, everyone also shares the benefits.
One in five Australian families will be impacted by the death of a parent, or a serious accident or illness resulting in that parent being unable to work[2]. Without insurance inside super, the clear majority of working Australians would have little to no form of lifestyle protection.
In the three-year period to 30 June 2016, approximately $13.8b of claims were paid via insurance in superannuation[3]. To put that in perspective, for every dollar received in premium, approximately 80c is paid out to families in need[4].
Yet, although we have an insurance inside superannuation system that is the envy of the world, many Australians simply do not know it exists or how it works. We’re regularly told that people were not aware they had insurance through their super until they found out ‘by chance’.
This is a crucial issue that isn’t being discussed. After all, how can we fully ascertain the value of insurance inside super while it is unknown and not well understood?
A conversation to be had
As an industry, and as individuals, we all have a role to play in protecting the lifestyles of working Australians and their loved ones. Together – as advisers, protectors and wealth generators – we can increase awareness and financial literacy, and reduce the risks of underinsurance.
This is the reason MetLife, with the support of its super fund partners, has embarked on a mission to ensure that all Australians understand that insurance is provided through super.
While there are certainly a number of key areas in which our industry and products need to improve, it’s important that we do not lose sight of the overarching benefits. The full value of insurance inside superannuation to the individual and to society is not being fully realised.
Since time began, women have used conversation as their tool of trade to make meaningful changes to their own lives and the lives of the others. As we prepare to acknowledge the many wonderful women working in financial services, it is timely to think about the many women we know who don’t have strong awareness or understanding about financial matters and how a single conversation with those people could be transformative.
[1] ASFA: The experience of individuals with insurance inside superannuation – September 2017, Page 5
[2] The Lifewise/ NATSEM Underinsurance Report February 2010 Page 2
[3] APRA Annual Superannuation Bulletin June 2016 Table 14c
[4] APRA – Quarterly Life Insurance Performance data base – Dec 2016 (issued Feb 2017)
